February 27, 2007

WOW, THE DOW IS TANKING TODAY, apparently in response to the Chinese market:

Stocks retreated sharply Tuesday after a sell-off in China rattled markets worldwide and data on durable goods orders came in well below expectations.

After reaching record highs on Monday, China’s stock markets reversed course drastically on Tuesday, plummeting in one of the biggest sell-offs in their history.

Analysts said there was no single reason for the plunge, but many have cautioned for months that the country’s volatile, roller-coaster market, which has been soaring almost nonstop for more than a year, appeared vulnerable.

The plunge in Chinese stocks had global reverberations. Stocks fell across Europe, with the major indexes in France, Germany and Britain all dropping more than 2 percent. In the United States, trading got off to a bad start and stayed that way.

I hope that James Waterton’s grim thoughts on China’s economic future, mentioned here earlier, aren’t coming true.